UK Economy Boosted By Wider Contributions
Revisions and improvements to the way UK output is measured show an uptick in its historic performance.
The Office for National Statistics (ONS) said gross domestic product (GDP) shrank by as much as 6% in the depths of the recession, lower than the previous "peak-to-trough" estimate of 7.2%.
The revisions for 1997 to 2012 show the size of the economy on average 4%, or £50bn, larger than previously thought each year.
The announcement was made after the ONS confirmed that GDP calculations would now include contributions to the economy from more 'colourful' corners of output, including prostitution and sales of illegal drugs.
The ONS sought to play down the additions in terms of their impact on the big picture, despite them contributing £10bn in 2009 alone.
ONS chief economist Joe Grice said: "Despite the wide ranging improvements underpinning the new estimates, the broad picture of the economy has not changed much.
"Although the downturn was less deep than previously estimated and subsequent growth stronger, it remains the case that the UK experienced the deepest recession since ONS records began in 1948 and the subsequent recovery has been unusually slow.
"Over the period 1998-2012, the overall size of revisions remains small at an average of 0.1 percentage points per year."
The news was welcomed by the Chancellor George Osborne.
He told Sky News: "The British recovery is stronger than previously thought. We see that Britain is becoming more competitive - moving up the global rankings.
"We see jobs being created in our country and that is evidence our plan is working ...but I'm the first to say the risks from abroad are rising as well so we've got to go on providing economic security and that is the task ahead."
Chris Leslie, Labour's shadow Chief Secretary to the Treasury, said: "These accounting changes to the way GDP is measured - for instance to include drug dealing and prostitution - do not mean families or businesses are better off.
"GDP growth has been revised up in every year since 2008. But it's still the case that working people are substantially worse off under this government, that the recovery was choked off in 2010 and that it is the slowest on record".
The ONS confirmed its revisions as a separate study - charting activity in the economy - pointing to an improving picture for service industries though firms were watching events in Ukraine closely.
The monthly Markit/CIPS purchasing managers index (PMI) for the sector jumped at its fastest rate for almost a year in August.
The strength in services contrasts with a slight cooling in the country's factory sector, which has also been hit by concerns that the conflict in Ukraine could escalate further.
Growth in construction was held back by shortages of skilled labour and materials.
Chris Williamson, chief economist at Markit which compiles the PMI, said August's PMI surveys suggested Britain's economy would grow at a pace similar to the 0.8% quarterly rate seen in the first two quarters of this year.